HB 2396

                    As Amended by Senate Committee
 Session of 2025
           Senate Substitute for HOUSE BILL No. 2396
                   By Committee on Assessment and Taxation
                                    3-19
1 AN ACT concerning property taxation; relating to property tax revenues of
2   taxing jurisdictions; authorizing the use of a protest petition to limit
3   funding of a taxing jurisdiction by property tax revenues above a
4   certain amount; providing for a protest petition notice to be sent to
5   taxpayers; establishing the protest petition notification costs fund;
6   relating to the revenue neutral rate; modifying the content requirements
7   of the revenue neutral rate hearing notice limiting certain increases in
8   property tax revenues unless approved by a majority of qualified
9   electors at an election called and held thereon; continuing
10   reimbursements from the taxpayer notification costs fund for an
11   additional five years; amending K.S.A. 2024 Supp. 79-1801 and 79-
12   2988 2025 Supp. 79-2989 and repealing the existing sections section.
13
14 Be it enacted by the Legislature of the State of Kansas:
15    New Section 1. (a) The governing body of any taxing subdivision
16 shall not approve any budget that provides for funding by property tax
17 revenues in an amount exceeding the amount of property tax levied for
18 the previous tax year as adjusted to reflect the increase in the average of
19 the consumer price index for all urban consumers in the midwest region
20 as published by the bureau of labor statistics of the United States
21 department of labor for the previous calendar year, except by not more
22 than 3%, unless the governing body first makes a proposal to approve
23 such budget with the adoption of a resolution and such resolution is
24 submitted to and approved by a majority of the qualified electors of the
25 taxing subdivision voting at an election called and held thereon. In
26 addition to other provisions, the resolution shall include the proposed
27 amount of property tax revenue for the current tax year and the amount
28 of property tax levied for the previous tax year.
29    (b) The election shall be noticed, called and held in the manner
30 provided in K.S.A. 10-120, and amendments thereto, and held at the next
31 regularly scheduled election held in August.
32    (c) If a resolution proposing to approve a budget funded with
33 property tax revenues in excess of the previous tax year as adjusted
34 pursuant to subsection (a) is not approved by a majority of the qualified
35 electors of the taxing subdivision voting at an election called and held
36 thereon pursuant to this section, then the governing body shall not
 S Sub HB 2396—Am. by SC  2
1 approve a budget that provides for funding by property tax revenues in
2 an amount that exceeds the amount of property tax levied for the
3 previous tax year.
4     Sec. 2. K.S.A. 2025 Supp. 79-2989 is hereby amended to read as
5 follows: 79-2989. (a) For calendar years 2024, 2025 and 2026 through
6 2031, if a county clerk has printing or postage costs pursuant to K.S.A.
7 2025 Supp. 79-2988, and amendments thereto, the county clerk shall
8 notify and provide documentation of such costs to the secretary of
9 revenue. The secretary of revenue shall certify the amount of moneys
10 attributable to such costs and shall transmit a copy of such certification
11 to the director of accounts and reports. Upon such receipt of such
12 certification, the director of accounts and reports shall transfer an
13 amount of moneys equal to such certified amount from the state general
14 fund to the taxpayer notification costs fund of the department of
15 revenue. The secretary of revenue shall transmit a copy of each such
16 certification to the director of legislative research and the director of the
17 budget.
18     (b) There is hereby established in the state treasury the taxpayer
19 notification costs fund that shall be administered by the secretary of
20 revenue. All expenditures from the taxpayer notification costs fund shall
21 be for the purpose of paying county printing and postage costs pursuant
22 to K.S.A. 2025 Supp. 79-2988, and amendments thereto. All expenditures
23 from such fund shall be made in accordance with appropriations acts
24 upon warrants of the director of accounts and reports issued pursuant to
25 vouchers approved by the secretary of revenue or the secretary's
26 designee.
27     New Section 1. (a) (1) The governing body of any taxing jurisdiction
28 that approves any appropriation or budget that provides for funding by
29 property tax revenues in excess of the amount provided in subsection (b)
30 may have such appropriation or budget subject to a protest petition and a
31 reduction in the amount of property tax revenues allowed to be levied by
32 the taxing jurisdiction. A protest petition contesting the increase in
33 property tax revenues for the taxing jurisdiction may be submitted to the
34 county clerk within 30 days, or the next business day after if the 30th day
35 falls on a weekend or county holiday, following the date that the governing
36 body of a taxing jurisdiction certifies to the county clerk the amount of ad
37 valorem tax to be levied pursuant to K.S.A. 79-1801, and amendments
38 thereto. If a taxing jurisdiction fails to timely certify the amount of ad
39 valorem tax to be levied pursuant to K.S.A. 79-1801, and amendments
40 thereto, the taxing jurisdiction shall be limited to funding by property tax
41 revenues at the maximum amount provided in subsection (b).
42     (2) The county clerk shall notify the county treasurer of all taxing
43 jurisdictions that approve any appropriation or budget that provides for
 S Sub HB 2396—Am. by SC  3
1 funding by property tax revenues in excess of the amount provided in
2 subsection (b). The county treasurer's office shall post on the county
3 website and social media, if such website or social media exists, and post
4 in the county treasurer's office whether any protest petitions are available
5 for any taxing jurisdiction within the county. The county treasurer shall
6 also make available in the county treasurer's office during business hours a
7 copy of each protest petition with the signature page in order to obtain
8 signatures. The requirements set forth in K.S.A. 25-3602, and amendments
9 thereto, relating to the filing of petitions at one time all in one group and
10 the petition circulator and signature requirements shall not apply to protest
11 petitions maintained by a county treasurer. The director of accounts and
12 reports shall design, revise and publish on the website of the department of
13 administration a standard protest petition form pursuant to the provisions
14 of this section and K.S.A. 25-3602, and amendments thereto. In the event
15 that a protest petition is signed by at least 10% of the qualified voters of
16 the votes cast for the office of president of the United States at the last
17 general election in such taxing jurisdiction, and is filed within 30 days
18 with the county clerk of the county, the taxing jurisdiction shall be limited
19 to funding by property tax revenues at the maximum amount provided in
20 subsection (b). Upon the finding that a petition protesting the increase in
21 funding by property tax revenues was signed by less than the required
22 number of voters, the taxing jurisdiction shall proceed with the increases
23 in funding by property tax revenues.
24     (b) A taxing jurisdiction shall be limited in its budget to a total
25 amount of ad valorem tax to be levied in an amount that is equal to or less
26 than the total amount of ad valorem tax levied for the preceding tax year,
27 increased by an amount that is equal to or less than such ad valorem tax
28 when the following are included:
29     (1) An increase of not more than the amount of the annual percentage
30 of consumer price index for all urban consumers in the midwest region as
31 published by the bureau of labor statistics of the United States department
32 of labor or 3%, whichever is less, multiplied by the total amount of ad
33 valorem tax levied for the preceding tax year;
34     (2) increased property tax revenues that, in the current year, are
35 produced and attributable to the taxation of the construction of any new
36 structures or improvements or the remodeling or renovation of any
37 existing structures or improvements on real property, excluding any
38 ordinary maintenance or repair of any existing structures or improvements
39 on the property. The director of property valuation shall provide to the
40 state treasurer any information required under this paragraph; and
41     (3) increased property tax revenues that are dedicated to paying off a
42 bond issuance that was approved by a vote of the electors at an election
43 held on and after July 1, 2025.
 S Sub HB 2396—Am. by SC  4
1     (c) The provisions of this section shall not apply to the state of
2 Kansas or a school district.
3     (d) (1) The county clerk shall provide a protest petition notice to each
4 taxpayer with property in taxing jurisdictions that approve any
5 appropriation or budget that provides for funding by property tax revenues
6 in excess of the amount provided in subsection (b). The county clerk shall
7 transmit the notice to each taxpayer by mail directed to the taxpayer's last
8 known address or by electronic means if such taxpayer and county clerk
9 have consented in writing to service by electronic means. The notice shall
10 be in a format prescribed by the director of accounts and reports. The
11 notice shall include, at a minimum:
12     (A) An explanation of the protest petition process and requirements,
13 including, but not limited to, the deadline for signatures, the physical
14 locations of protest petitions, any website addresses where the protest
15 petition form is available, a telephone number to call to request a protest
16 petition form be mailed to a person who is unable to access a location in
17 person and the effect of a successful protest petition;
18     (B) the appraised value and assessed value of the taxpayer's property
19 for the current year and the previous year;
20     (C) the tax rate and amount of property tax of all taxing jurisdictions
21 related to the taxpayer's property from the previous year's tax statement;
22     (D) the proposed tax rate and estimated amount of property tax of all
23 taxing jurisdictions related to the taxpayer's property for the current year;
24 and
25     (E) a clear and conspicuous identification of the taxing jurisdictions
26 that approved any appropriation or budget that is subject to a protest
27 petition pursuant to this section.
28     (2) In the event that a county clerk incurred costs of printing and
29 postage that were not reimbursed pursuant to paragraph (3), such county
30 clerk may seek reimbursement from all taxing jurisdictions with an
31 appropriation or budget that is subject to a protest petition. Such costs shall
32 be shared proportionately by all such taxing jurisdictions that were
33 included on the same notice based on the total property tax levied by each
34 taxing jurisdiction. Payment of such costs shall be due to the county clerk
35 by December 31 of the year in which such costs were incurred.
36     (3) (A) For calendar years 2025 and 2026, if a county clerk has
37 printing or postage costs pursuant to paragraph (1), the county clerk shall
38 notify and provide documentation of such costs to the secretary of
39 revenue. The secretary of revenue shall certify the amount of moneys
40 attributable to such costs and transmit a copy of such certification to the
41 director of accounts and reports. Upon such receipt of such certification,
42 the director of accounts and reports shall transfer an amount of moneys
43 equal to such certified amount from the state general fund to the protest
 S Sub HB 2396—Am. by SC  5
1 petition notification costs fund of the department of revenue. The secretary
2 of revenue shall transmit a copy of each such certification to the director of
3 legislative research and the director of the budget.
4     (B) There is hereby established in the state treasury the protest
5 petition notification costs fund that shall be administered by the secretary
6 of revenue. All expenditures from the protest petition notification costs
7 fund shall be for the purpose of paying county printing and postage costs
8 pursuant to paragraph (1). All expenditures from such fund shall be made
9 in accordance with appropriations acts upon warrants of the director of
10 accounts and reports issued pursuant to vouchers approved by the
11 secretary of revenue or the secretary's designee.
12     Sec. 2. K.S.A. 2024 Supp. 79-1801 is hereby amended to read as
13 follows: 79-1801. (a) Except as provided by subsection (b), each year the
14 governing body of any city, the trustees of any township, the board of
15 education of any school district and the governing bodies of all other
16 taxing subdivisions shall certify, on or before August 25, to the proper
17 county clerk the amount of ad valorem tax to be levied. Thereupon, the
18 county clerk shall place the tax upon the tax roll of the county, in the
19 manner prescribed by law, and the tax shall be collected by the county
20 treasurer. The county treasurer shall distribute the proceeds of the taxes
21 levied by each taxing subdivision in the manner provided by K.S.A. 12-
22 1678a, and amendments thereto.
23     (b) Prior to January 1, 2021, if the governing body of a city or county
24 must conduct an election for an increase in property tax to fund any
25 appropriation or budget under K.S.A. 25-433a, and amendments thereto,
26 the governing body of the city or county shall certify, on or before October
27 1, to the proper county clerk the amount of ad valorem tax to be levied. On
28 and after January 1, 2021 2025, if the governing body of a taxing
29 subdivision must conduct a public hearing to approve exceeding the
30 revenue neutral rate under K.S.A. 2024 Supp. 79-2988, and amendments
31 thereto, or amend such governing body's budget pursuant to a successful
32 protest petition under section 1, and amendments thereto, the governing
33 body of the taxing subdivision shall certify, on or before October 1, to the
34 proper county clerk the amount of ad valorem tax to be levied.
35     Sec. 3. K.S.A. 2024 Supp. 79-2988 is hereby amended to read as
36 follows: 79-2988. (a) On or before June 15 each year, the county clerk
37 shall calculate the revenue neutral rate for each taxing subdivision and
38 include such revenue neutral rate on the notice of the estimated assessed
39 valuation provided to each taxing subdivision for budget purposes, except
40 that for tax year 2024, the deadline shall be extended to July 1, 2024. The
41 director of accounts and reports shall modify the prescribed budget
42 information form to show the revenue neutral rate.
43     (b) Except as otherwise provided in this section, no tax rate in excess
 S Sub HB 2396—Am. by SC  6
1 of the revenue neutral rate shall be levied by the governing body of any
2 taxing subdivision unless a resolution or ordinance has been approved by
3 the governing body according to the following procedure:
4     (1) At least 10 days in advance of the public hearing, the governing
5 body shall publish notice of its proposed intent to exceed the revenue
6 neutral rate by publishing notice:
7     (A) On the website of the governing body, if the governing body
8 maintains a website; and
9     (B) in a weekly or daily newspaper of the county having a general
10 circulation therein. The notice shall include, but not be limited to, its
11 proposed tax rate, its revenue neutral rate and the date, time and location
12 of the public hearing.
13     (2) On or before July 20, the governing body shall notify the county
14 clerk of its proposed intent to exceed the revenue neutral rate and provide
15 the date, time and location of the public hearing and its proposed tax rate.
16 For all tax years commencing after December 31, 2021, the county clerk
17 shall notify each taxpayer with property in the taxing subdivision, by mail
18 directed to the taxpayer's last known address, of the proposed intent to
19 exceed the revenue neutral rate at least 10 days in advance of the public
20 hearing. Alternatively, the county clerk may transmit the notice to the
21 taxpayer by electronic means at least 10 days in advance of the public
22 hearing, if such taxpayer and county clerk have consented in writing to
23 service by electronic means. The county clerk is not required to send a
24 notice to a property owner of property that is exempt from ad valorem
25 taxation. The county clerk shall consolidate the required information for
26 all taxing subdivisions relevant to the taxpayer's property on one notice.
27 The notice shall be in a format prescribed by the director of accounts and
28 reports. The notice shall include, but not be limited to:
29     (A) The following heading:
30     "NOTICE OF PROPOSED PROPERTY TAX INCREASE AND
31 PUBLIC HEARINGS
32     [Current year] [County name] County Revenue Neutral Rate Notice
33     This is NOT a bill. Do not remit payment.";
34     (B) the following statement:
35     "This notice contains estimates of the tax on your property and
36 proposed property tax increases. THE ACTUAL TAX ON YOUR
37 PROPERTY MAY INCREASE OR DECREASE FROM THESE
38 ESTIMATES. Governing bodies of taxing subdivisions must vote in order
39 to exceed the Revenue Neutral Rate to increase the total property taxes
40 collected. Governing bodies will vote at public hearings at the dates, times
41 and locations listed. Taxpayers may attend and comment at the hearings.
42 Property tax statements will be issued after mill rates are finalized and
43 taxes are calculated.";
 S Sub HB 2396—Am. by SC  7
1     (C) the appraised value and assessed value of the taxpayer's property
2 for the current year and the previous year;
3     (D) the tax rate and amount of property tax of each taxing
4 subdivision on the taxpayer's property from the previous year's tax
5 statement in a column titled: "[Previous year] Tax";
6     (E) the revenue neutral rate and estimated amount of property tax for
7 the current year of each taxing subdivision on the taxpayer's property
8 based on the revenue neutral rate of each taxing subdivision in a column
9 titled: "[Current year] Tax at Revenue Neutral Rate";
10     (F) the estimated amount of property tax for the current year of each
11 taxing subdivision on the taxpayer's property based on either: (i) The
12 revenue neutral rate for a taxing subdivision that does not intend to exceed
13 its revenue neutral rate; or (ii) the proposed tax rate provided by the taxing
14 subdivision, if the taxing subdivision notified the county clerk of its
15 proposed intent to exceed its revenue neutral rate , and such rate used in
16 the calculation, in a column titled: "[Current year] Maximum Proposed
17 Tax";
18     (G) the difference between the amount of the current year's maximum
19 proposed tax and the previous year's tax, reflected in dollars and a
20 percentage, for each taxing subdivision in a column titled: "[Current year]
21 Maximum Proposed Tax Exceeding [Previous year] Tax";
22     (H) the date, time and location of the public hearing of each taxing
23 subdivision that notified the county clerk of its proposed intent to exceed
24 its revenue neutral rate in a column titled: "Date, Time and Location of
25 Public Hearing"; and
26     (I) for each taxing subdivision public hearing listed pursuant to
27 subparagraph (H), the difference between the current year's maximum
28 proposed tax and the estimated amount of property tax based on the
29 revenue neutral rate of such taxing subdivision in a column titled:
30 "[Current year] Maximum Proposed Tax Exceeding Tax at Revenue
31 Neutral Rate".
32     The columns described in subparagraphs (D) through (G) shall include
33 a total of the amounts at the end of each column. Although the state of
34 Kansas is not a taxing subdivision for purposes of this section, the notice
35 shall include the previous year's tax amount and the estimate of the tax for
36 the current year on the taxpayer's property based on the statutory mill
37 levies.
38     (3) The public hearing to consider exceeding the revenue neutral rate
39 shall be held not sooner than August 20 and not later than September 20.
40 The governing body shall provide interested taxpayers desiring to be heard
41 an opportunity to present oral testimony within reasonable time limits and
42 without unreasonable restriction on the number of individuals allowed to
43 make public comment. The public hearing may be conducted in
 S Sub HB 2396—Am. by SC  8
1 conjunction with the proposed budget hearing pursuant to K.S.A. 79-2929,
2 and amendments thereto, if the governing body otherwise complies with
3 all requirements of this section. Nothing in this section shall be construed
4 to prohibit additional public hearings that provide additional opportunities
5 to present testimony or public comment prior to the public hearing
6 required by this section.
7     (4) A majority vote of the governing body, by the adoption of a
8 resolution or ordinance to approve exceeding the revenue neutral rate,
9 shall be required prior to adoption of a proposed budget that will result in a
10 tax rate in excess of the revenue neutral rate. Such vote of the governing
11 body shall be conducted at the public hearing and on the same day as the
12 commencement of the public hearing after the governing body has heard
13 from interested taxpayers and shall be a roll call vote. If the governing
14 body approves exceeding the revenue neutral rate, the governing body
15 shall not adopt a budget that results in a tax rate in excess of its proposed
16 tax rate as stated in the notice provided pursuant to this section. A copy of
17 the resolution or ordinance to approve exceeding the revenue neutral rate
18 and a certified copy of any roll call vote reporting, at a minimum, the
19 name and vote of each member of the governing body related to exceeding
20 the revenue neutral rate, whether approved or not, shall be included with
21 the adopted budget, budget certificate and other budget forms filed with
22 the county clerk and the director of accounts and reports and shall be
23 published on the website of the department of administration.
24     (c) (1) Any governing body subject to the provisions of this section
25 that does not comply with subsection (b) shall refund to taxpayers any
26 property taxes over-collected based on the amount of the levy that was in
27 excess of the revenue neutral rate.
28     (2) Any taxpayer of the taxing subdivision that is the subject of the
29 complaint or such taxpayer's duly authorized representative may file a
30 complaint with the state board of tax appeals by filing a written complaint,
31 on a form prescribed by the board, that contains the facts that the
32 complaining party believes show that a governing body of a taxing
33 subdivision did not comply with the provisions of subsection (b) and that a
34 reduction or refund of taxes is appropriate. The complaining party shall
35 provide a copy of such complaint to the governing body of the taxing
36 subdivision making the levy that is the subject of the complaint.
37 Notwithstanding K.S.A. 74-2438a, and amendments thereto, no filing fee
38 shall be charged by the executive director of the state board of tax appeals
39 for a complaint filed pursuant to this paragraph. The governing body of the
40 taxing subdivision making the levy that is the subject of the complaint
41 shall be a party to the proceeding. Notice of any summary proceeding or
42 hearing shall be served upon such governing body, the county clerk, the
43 director of accounts and reports and the complaining party. It shall be the
 S Sub HB 2396—Am. by SC  9
1 duty of the governing body to initiate the production of evidence to
2 demonstrate, by a preponderance of the evidence, the validity of such levy.
3 If upon a summary proceeding or hearing, it shall be made to appear to the
4 satisfaction of the board that the governing body of the taxing subdivision
5 did not comply with subsection (b), the state board of tax appeals shall
6 order such governing body to refund to taxpayers the amount of property
7 taxes over collected or reduce the taxes levied, if uncollected. The
8 provisions of this paragraph shall not be construed as prohibiting any other
9 remedies available under the law.
10     (d) On and after January 1, 2022, in the event that the tax levied by a
11 school district pursuant to K.S.A. 72-5142, and amendments thereto,
12 increases the property tax revenue generated for the purpose of calculating
13 the revenue neutral rate from the previous tax year and such amount of
14 increase in revenue generated from such tax levied is the only reason that
15 the school district would exceed the total property tax revenue from the
16 prior year, the school district shall be deemed to not have exceeded the
17 revenue neutral rate in levying a tax rate in excess of the revenue neutral
18 rate to take into account the increase in revenue from only such tax levied.
19     (e) (1) Notwithstanding any other provision of law to the contrary, if
20 the governing body of a taxing subdivision must conduct a public hearing
21 to approve exceeding the revenue neutral rate under this section, the
22 governing body of the taxing subdivision shall certify, on or before
23 October 1, to the proper county clerk the amount of ad valorem tax to be
24 levied.
25     (2) If a governing body of a taxing subdivision did not comply with
26 the provisions of subsection (b) and certifies to the county clerk an amount
27 of ad valorem tax to be levied that would result in a tax rate in excess of its
28 revenue neutral rate, the county clerk shall reduce the ad valorem tax to be
29 levied to the amount resulting from such taxing subdivision's revenue
30 neutral rate.
31     (f) As used in this section:
32     (1) "Taxing subdivision" means any political subdivision of the state
33 that levies an ad valorem tax on property.
34     (2) "Revenue neutral rate" means the tax rate for the current tax year
35 that would generate the same property tax revenue as levied the previous
36 tax year using the current tax year's total assessed valuation. To calculate
37 the revenue neutral rate, the county clerk shall divide the property tax
38 revenue for such taxing subdivision levied for the previous tax year by the
39 total of all taxable assessed valuation in such taxing subdivision for the
40 current tax year, and then multiply the quotient by 1,000 to express the rate
41 in mills. The revenue neutral rate shall be expressed to the third decimal
42 place.
43     (g) In the event that a county clerk incurred costs of printing and
 S Sub HB 2396—Am. by SC  10
1 postage that were not reimbursed pursuant to K.S.A. 2024 Supp. 79-2989,
2 and amendments thereto, such county clerk may seek reimbursement from
3 all taxing subdivisions required to send the notice. Such costs shall be
4 shared proportionately by all taxing subdivisions that were included on the
5 same notice based on the total property tax levied by each taxing
6 subdivision. Payment of such costs shall be due to the county clerk by
7 December 31.
8     (h) The department of administration or the director of accounts and
9 reports shall make copies of adopted budgets, budget certificates, other
10 budget documents and revenue neutral rate documents available to the
11 public on the department of administration's website on a permanently
12 accessible web page that may be accessed via a conspicuous link to that
13 web page placed on the front page of the department's website. The
14 department of administration or the director of accounts and reports shall
15 also make the following information for each tax year available on such
16 website:
17     (1) A list of taxing subdivisions by county;
18     (2) whether each taxing subdivision conducted a hearing to consider
19 exceeding its revenue neutral rate;
20     (3) the revenue neutral rate of each taxing subdivision;
21     (4) the tax rate resulting from the adopted budget of each taxing
22 subdivision; and
23     (5) the percent change between the revenue neutral rate and the tax
24 rate for each taxing subdivision.
25     (i) Notwithstanding any provisions to the contrary, in the event any
26 governing body does not comply with the provisions of subsection (b)
27 because such governing body did not intend to exceed its revenue neutral
28 rate but the final taxable assessed valuation of such taxing subdivision
29 used to calculate the actual tax levy is less than the estimated assessed
30 valuation used to calculate the revenue neutral rate, such governing body
31 shall be permitted to levy a tax rate that generates the same amount of
32 property tax revenue as levied the previous year or less.
33     Sec. 4. 3. K.S.A. 2024 Supp. 79-1801 and 79-2988 are 2025 Supp.
34 79-2989 is hereby repealed.
35     Sec. 5. 4. This act shall take effect and be in force from and after its
36 publication in the statute book Kansas register.